Appeal details
Counselvise Citation
[2011] 124 COUNSELVISE.COM (IT) 8106 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 year(s) 10 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
05-08-2011
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
18-07-2011
Assessment Year
misc
Appeal Filed On
28-09-2004
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMB ER IT (SS)A NO.98/HYD/2004 : BLOCK ASSTT. YEAR 1990- 91 TO 1999- 2000 SHRI SHANTILAL CHOWDARY, TIRUPATI. [AACPC2440A] VS ACIT, CENTRAL CIRCLE, TIRUPATI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI Y. RATNAKAR RESPONDENT BY : SMT. NIVEDITA BISWAS O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST OR DER OF CIT (A), TIRUPATI DATED 29-7-2004 AND IT PERTAINS T O THE BLOCK ASSESSMENT PERIOD FROM 1990-91 TO 1999-2000. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PAW N BROKER DOING BUSINESS AT BAZAR STREET, TIRUPATI. HE DERIVES INCOME FROM PROPERTY, SALARY AND OTHER SOURCES ALSO. SEARCH AND SEIZURE OPERATIONS UNDER SECTION 132 OF THE ACT WERE CARRIED OUT IN THE BUSINESS-CUM-RESIDENTIAL PREMISES OF SRI DEVRAJ SHANTILAL CHODHAR ON 15-12-1999. THE SEARCH SHOWED THAT THERE WERE DIFFERE NCES IN PLEDGE REGISTER AND WHAT WAS SHOWN TO THE INCOME-TAX DEPARTMEN T. IN VIEW OF THE ABOVE, NOTICE UNDER SECTION 158 BC WAS ISSUED TO T HE ASSESSEE ON 13-4-2000. IN RESPONSE THERETO, THE ASSESSEE FILED A RET URN OF INCOME ON 30-7-2001 DECLARING NIL UNDISCLOSED INCOME. AFTER DI SCUSSING ALL THE IT(SS)A NO. 98/HYD /2004 SRI SHANTILAL CH OWDARY, HYD. ================ ====== 2 POINTS ELABORATELY IN HIS ORDER, THE ASSESSING OFFICER DETERMINED THE TOTAL UNDISCLOSED INCOME OF THE ASSESSEE AT RS.20,02,125/- AND A LSO LEVIED PENALTY OF RS.13,18,082/- UNDER SECTION 271(1)( C) OF T HE ACT. AGGRIEVED AGAINST THE PENALTY ORDER OF THE ASSESSING OFFICER, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (A). ON APPEAL, THE CIT (A) HELD AS FOLLOWS IN HIS ORDER IN PARA-7 OF HIS ORDER:- THE ASSESSEE IN THE GROUNDS OF APPEAL HAS EMPHASIZED T HAT NO PENALTY CAN BE LEVIED ON THE BASIS OF ADDITION AND RELIED UPON VARIO US CASE LAWS. THE ASSESSEES CONDUCT OF FILING NIL UNDISCLOSED INCOME IN THE BLOCK RETURN DOES NOT SUPPORT HIS ASSERTIONS THAT THE UNDISCLOSED INCOME W AS VOLUNTARILY OFFERED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AFTER CO NDUCTING A DETAILED PAINSTAKING AND ELABORATE ENQUIRY, THE ASSESSING OFFICER WAS ABLE TO LAY HIS HANDS ON THE CORRECT UNDISCLOSED INCOME AND WHEN THE ASSESSEE WAS IN NO POSITION TO EXPLAIN, HAS RELUCTANTLY ACCEPTED THE DISC REPANCIES. HAVING NO LEEWAY, THE ASSESSEE WAS COMPELLED TO ACCEPT, WHICH CAN NOT BE TERMED AS A CONFESSION TO THE DEPARTMENT NOR A VOLUNTARY DECLARATIO N ENABLING HIM TO ESCAPE THE LEVY OF PENALTY. IN FACT THE UNDISCLOSED INCOME HAS NOT BEEN TAKEN AS PER ANY VOLUNTARY DECLARATION BUT AS PER THE DETAILED ENQUIRIES DONE BY THE ASSESSING OFFICER. HAVING CONSIDERED ALL ASPECTS OF TH E CASE, THE ASSESSMENT ORDER AS WELL AS A VERY ELABORATE, DETAILED AND REASONED P ENALTY ORDER, I AM INCLINED TO SUSTAIN THE PENALTY ORDER PASSED BY THE AS SESSING OFFICER UNDER SECTION 158BFA (2) OF THE I T ACT, 1961. ACCORDINGLY, THE CIT (A) DISMISSED THE APPEAL FILED BY THE ASSESSEE. AGGRIEVED AGAINST THE FINDINGS AND THE DECISION OF THE CIT (A), THE ASSESSEE IS ON FURTHER APPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BY WAY OF WRITTEN SUBMISSIONS THAT THE ASSESSEE VIZ., SHANTILAL CHO WDARY DIED ON 3-1-2006 SUDDENLY DUE TO A MASSIVE HEART ATTACK AND HE WAS LOOKING AFTER ALL THE INCOME-TAX PROCEEDINGS. HE WAS DEALING W ITH ALL THE TAX MATTERS AND HE WAS AWARE THE FACTUAL POSITION. NONE O F THE LEGAL HEIRS WERE DEALING WITH THE TAX MATTERS DURING THE LIFE TI ME OF THE DECEASED. IN FACT, IN THE STAGE OF ASSESSMENT PROCEEDINGS, NONE OF T HE LEGAL HEIRS OF THE DECEASED PARTICIPATED IN THE PROCEEDINGS. IN THE COURSE OF SEARCH IT(SS)A NO. 98/HYD /2004 SRI SHANTILAL CH OWDARY, HYD. ================ ====== 3 ON 15-12-1999 WHATEVER ACCOUNTED GOLD WAS AVAILABLE, W HICH WAS ACCOUNTED WITH THE FAMILY MEMBERS, WAS TAKEN AWAY AND H AVE NOT BEEN RELEASED TILL DATE AND THE FAMILY AT PRESENT IS ON HAN D TO MOUTH EXISTENCE DEVOID OF ANY MEANS. THE ONLY ASSET AVAILABLE IS THE SEIZED GOLD WHICH IS WITH THE INCOME-TAX DEPARTMENT. IT IS SUB MITTED THAT IF THERE WAS ANY UNACCOUNTED INCOME AS SUGGESTED, THE TRACE OF IT WOULD BE AVAILABLE IN THE FORM OF SOME WEALTH, LIFE STYLE O F THE DECEASED AND HIS FAMILY. IN THE COURSE OF SEARCH, NO MONEY WAS FOUND. NO VALUABLE ASSETS WERE FOUND WHICH WAS SEIZED, OTHER THAN ACCOUNTED GO LD. THE LEGAL HEIRS AFTER THE DEATH OF THE DECEASED ARE LIVING IN A DESPERATE STATE, JUST ABOVE THE POVERTY LINE. JUST BECAUSE THE FA CTUAL EXPLANATION ON ITEMS ADDED HAS NOT BEEN STATED AT THE ASSESSMENT STAGE, IT DOES NOT FOLLOW AUTOMATICALLY THAT THERE IS CONCEALMENT AS A MAT TER OF COURSE. THE ASSESSEE IS ENTITLED TO PLACE EXPLANATION BEFORE THE ASSESSING OFFICER OR EVEN AT THE STAGE OF THE FIRST APPELLATE AUTHORITY ON THE CORRECTNESS OR OTHERWISE OF THE ALLEGATION OF CONCEALMENT. BASED ON TH E VARIOUS PAPERS AVAILABLE ON RECORD MAINTAINED BY THE DECEASED, THE LE GAL HEIRS HAVE GONE INTO THE FACTUAL ASPECT OF THE ADDITIONS MADE. O N THE BASIS OF THE DOCUMENTS, FILES AND NOTES OF THE DECEASED AVAILABLE IN F ILES THE EXPLANATION ON THE ITEMS ADDED IS PLACED BEFORE THE TR IBUNAL. IN FACT, A WRIT PETITION WAS FILED BEFORE GIVING THE FACTUAL POS ITION. THIS PETITION IS STILL PENDING. WRITTEN SUBMISSIONS WERE ALSO FILED BEFOR E THE CIT (A). THE CIT (A) HAS GONE BY TECHNICALITIES THAN BY THE EXPL ANATION GIVEN IN RESPECT OF ADDITIONS MADE. IT IS PRAYED THAT THE TRIBU NAL MAY BE PLEASED TO CONSIDER THE SAME. IN THE ALTERNATIVE, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR EX AMINING THE SAME ON MERITS AFRESH. THE LEARNED COUNSEL FOR THE ASSESSEE FILE D SEPARATE IT(SS)A NO. 98/HYD /2004 SRI SHANTILAL CH OWDARY, HYD. ================ ====== 4 WRITTEN SUBMISSIONS ON THE VARIOUS ADDITIONS MADE FOR WH ICH PENALTIES HAVE BEEN LEVIED. 4. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE RELIED ON THE ORDER OF THE CIT (A). IT IS SUBMITTED T HAT THE VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER FOR WHICH PENALTIE S WERE LEVIED CAME TO THE LIGHT OF THE DEPARTMENT ONLY AFTER THE SE ARCH AND THE SAME WAS CONFIRMED BY THIS TRIBUNAL. THE ASSESSEE WAS NEITHER I NNOCENT NOR CO-OPERATIVE IN ANY SENSE DURING THE SEARCH PROCEEDINGS. S HE RELIED ON THE FOLLOWING CASE-LAWS IN SUPPORT OF HER SUBMISSIONS:- 1) K.L. SWAMY VS. CIT 239 ITR 386 2) M. SAJJANRAJ NAHAR & OTHERS VS. CIT (MAD.)-283 IT R 230 3) H.V. VENUGOPAL CHETTAIAR VS. CIT 153 ITR 376 4) DDIT VS. CHIRAG METAL ROLLING MILLS LTD. 305 ITR 29 5) P.C. JOSEPH & BRS. VS. CIT 240 ITR 818 6) INDIA CERAMIC CORPORATION 93 TAXMAN 83 7) ANAND LIQUOPRS CS. CIT (KER) 232 ITR 35 8) CIT VS. DKB AND CO. (KER) 243 ITR 618 9) RATHNAM & CO. VS. IAC124 ITR 376. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE RIVAL PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND FRO M THE RECORD THAT THE ASSESSEE HAS GIVEN DETAILED EXPLANATION ON VARIOUS AD DITIONS MADE BY THE ASSESSING OFFICER, BUT, HOWEVER, THE CIT (A) HAS G ONE THROUGH ONLY BY TECHNICALITIES THAN BY THE EXPLANATION GIVEN I N RESPECT OF SUCH ADDITIONS MADE WHILE DISPOSING OF THIS APPEAL. IN OUR CO NSIDERED OPINION, THE CIT (A) SHOULD HAVE GONE THROUGH INTO THE MERITS OF THE EXPLANATION IT(SS)A NO. 98/HYD /2004 SRI SHANTILAL CH OWDARY, HYD. ================ ====== 5 MADE BY THE ASSESSEE FOR EACH OF THE ADDITIONS MADE BY THE ASSESSING OFFICER INDEPENDENTLY INSTEAD OF DISMISSING THE APPEAL O N ONLY TECHNICALITIES. THEREFORE, AFTER CONSIDERING THE TOTALIT Y OF FACTS AND THE CIRCUMSTANCES OF THE CASE, WE FIND MERIT IN THE ALTERNATIV E PRAYER/CONTENTION OF THE ASSESSEE THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING THE SA ME ON MERITS AFRESH. IN VIEW OF THE ABOVE, WE FEEL IT PROPER AND JUST TO REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING T HE SAME ON MERITS AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DISPOSE OFF THE SAME IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE ORDER PRONOUNCED IN THE OPEN COURT ON 5-8-2011. SD/- SD/- (G.C. GUPTA) (AKBER BASHA) VICE PRESIDENT. ACCOUNTANT MEMBER. DT/- 5-8-2011. COPY FORWARDED TO: 1. SHRI SHANTILAL CHOWDARY, D.NO.39, BAZAR STREET, TIRUPATI. 2. 3. 4 5. JMR* ACIT, CENTRAL CIRCLE, TIRUPATI. CIT (A),TIRUPATI. CIT, AP, HYDERABAD. THE DR, ITAT, HYDERABAD. IT(SS)A NO. 98/HYD /2004 SRI SHANTILAL CH OWDARY, HYD. ================ ====== 6
